Health Savings Accounts

by Miriam Caldwell | More from this Blogger

27 Oct 2006 09:10 PM

You may want to take advantage of a health savings account. (This should not be confused with the flexible spending account that is often available through employers.) A health savings account is designed to allow you to save money tax free for out-of-pocket health care expenses. There are several strict rules associated with this account, and so you will need to make sure that you qualify before you open one up.

In order to open a health savings account you need to have a high deductible health insurance policy. This policy is often referred to as catastrophic insurance as well. Generally this means that you need to pay a certain amount out-of-pocket before the insurance will begin to cover anything. You are not allowed to have a health savings account if you have normal health insurance, are on Medicare, have no medical insurance or have used any veteran's benefits in the last three months.

The health savings account will allow you to save money tax-free to cover your medical expenses for the year. You are not allowed to save more than your deductible. If you have a family, you are not allowed to save more than your deductible for the whole family. In addition the amount is not to exceed $2700.00 for a single person and $5450.00 for a family.

You can only use this money for allowed healthcare expenses. These do not include cosmetic surgery. It is important to note that the money does rollover from year to year, so you will not lose any of the money that you do not use that year. This may be the answer to help many self-employed people who carry their own insurance.

There are also options for employers to contribute to their employees health savings accounts, if the employer offers a high deductible insurance policy. The minimum amount the deductible needs to be is $1100 dollars for one person in order to qualify. You may want to talk to your employer to see if they will consider contributing to your account.

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Learn more about Miriam Caldwell

Miriam is a SAHM mom of three children. She has a daughter who is seven, and two sons, four and two. She loves being a parent and spending time with her children.

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